Tuesday, May 31, 2011

Moved up initially in the morning session but SENSEX could not cross the first resistance level and was subdued through out the later part of the day SENSEX closed down but on the daily chart it is not a strong bearish candle and some buying support can emErge from lower supports.

On the weekly chart as on last Friday it was a long legged doji which suggests support emerging at lower levels but such pattern needs FOLLOW UP move especially above the HEAD of doji pattern this SENSEX value is 18298.

But to give more strength SENSEX has to close above 18429 if that happens then only one can think of further upside and in any case a CLOSE below the GAP area of 18072-18087 will confirm that one can go short at every rise.

NIFTY :

For NIFTY a sustained move above the last week LONG LEGGED HAMMER pattern HIGH would be needed to confirm the strength of buying interest it has shown from lower levels around 5330 so NIFTY has to first give a close above 5485 and then a close above 5521-5542 will give more strength .

BUT looking at theweakness of yesterday unless NIFTY gives a close above 5521 one can not go long in a big way.

NIFTY made a high of 5509 yesterday and its 21 DAY EMA value is 5503 also note that the 34 DAY EMA value is 5547 which is also a RESISTANCE value and it matches with one high at 5542.

Monday, May 30, 2011

TECHNICAL ANALYSIS OF SENSEX/NIFTY FOR THE WEEK STARTING 30th MAY 2011

In the last week both SENSEX and NIFTY did achieve OUR TARGETS OF 17825 AND 5340 with precision as SENSEX made a low of 17786 and NIFTY made a low of 5329 BUT we clearly mentioned from all our platforms viz. DAILY TECHNICAL VIEW, WEEKLY CHART BOOK and CONFERENCE CALL that SENSEX and NIFTY need to have close below the target levels to open up further down moves and that has not happened.

We will wait and watch how markets behave in next two days as we will have a Monthly Close on TUESDAY in the next week.

We have DEFINED a major STOP&REVERSE levels at 18725 and 5605 for SENSEX and NIFTY respectively and we need to have weekly close above these levels for the medium term TREND REVERSAL.

PLEASE NOTE that we had suggested at least a corrective upside from 26th of May through our Daily Technical View. Now if this corrective started from 5329 /17786 proves to be a fresh leg of NEW AND BIGGER UPSIDE then we will have enough TECHNICAL CLUES and since there are many FUNDAMENTALLY SOUND STOCKS which have been heavily beaten down on their TECHNICAL WEAKNESS, we will have many potentially good investment/trading stocks for the upside.

The “RESULT SYNDROME” continued with the fresh addition of TATA MOTORS added in heavily beaten down stocks after RESULTS ANNOUNCEMENT.

In this week CHARTBOOK we will present a list of stocks with potential to move up if NIFTY /SENSEX cross our major SAR levels and a list of stocks which can still be shorted if NIFTY /SENSEX close below 5330/17786 in the near future.

POSSIBLE UPSIDE TARGETS FOR SENSEX AND NIFTY

Since last three weeks, we had seen MARKETS showing strength on Friday and the rally got fizzled out on Monday BUT this week the upside rally started on Thursday and got more strength on Friday so it does not seem that the rally will fizzle out that easily on Monday and for SENSEX AND NIFTY this upside can easily reach up to minimum 38.2% of the fall started from Mid April-2011 for SENSEX this level is 18539 and for NIFTY it is 5557 and it will be very interesting if both indices can close at or above these levels because there will be some serious selling pressure coming at these levels.

Next logical targets are 18777 and 5631 and PLEASE note that SENSEX and NIFTY will have to give weekly closing (AS ON ANY FRIDAY) above 18725 and 5605 respectively for a solid TREND REVERSAL.

DAILY VIEW:

SENSEX continued its upward move from supports and ended the CRUCIAL week with little gain but RECOVERED smartly from middle week lows confirming supports at 78.6% retracement level and 89 week EMA.

We suggested that to open up a LARGER down move SENSEX must close a week below 18725 which has not happened so now we may have further confusing time with upward bias.

SENSEX has resistance at 18269 and but SENSEX will have to close above 18429 to gain further upside momentum.

One thing is for sure that now we have sort of a short term BOTTOM in place around 17786 and with a DRAGON FLY DOJICandle Pattern On Weekly Chart confirms strong support around 17786, we should try and identify short term SELECTIVE buying opportunities.

NIFTY :

With a LONG LEGGED HAMMER on weekly chart and highly oversold position of momentum indicator stochastic on Daily & Weekly chart, NIFTY has short term bottom around 5328 and unless 5328 does not get broken on weekly CLOSING BASIS, we should identify short term SELECTIVE buying opportunities.

For today and tomorrow if NIFTY closes above 5521 it will have first target around 5605-5621 zone which is also STOP & REVERSRE POINT and 200/89 Days EMA VALUE while 5413 and 5356 will act as support levels.